"Today's action will help auto dealers and scrap recyclers across the country protect public health and properly dispose of these defective airbags inflators," said EPA Acting Administrator Andrew Wheeler.

The states, including California, New York, Illinois, Massachusetts and Pennsylvania, called the Trump administration proposal "unlawful" and "reckless" in a 143-page document reviewed by Reuters ahead of its filing later Friday.

The administration billed the proposed rollback from Obama-era fuel efficiency standards as a way to help car companies and lower vehicle prices for consumers, but critics said the plan would accelerate climate change and increase fuel prices.

The vehicles have a used engine in a new frame and rules introduced under former President Barack Obama, a Democrat, said nearly all new trucks on the road must use more efficient, less polluting engines.

Last year, the Milwaukee-based motorcycle maker agreed to pay a $12 million civil fine and stop selling illegal after-market devices that cause its vehicles to emit too much pollution as part of a federal court consent decree.

The filing is the result of many months of close collaboration between FCA US, EPA and CARB, including extensive testing of the vehicles. FCA will clarify issues related to the Company’s emissions control technology.

Experts believe that sourcing batteries that generate power similar to that of a petrol engine will be difficult, but it will be important for automakers to source that if vehicles need to be powered by greener sources.

"FCA US is disappointed that the EPA has chosen to issue a notice of violation with respect to the emissions control technology employed in the company’s 2014-16 model year light duty 3.0-liter diesel engines."

In fact, segment leaders like Maruti Suzuki, Tata Motors and Hero MotoCorp have reported de-growth of 34.3 per cent, 45 per cent and 20 per cent, respectively giving a clear indication of a prolonged slowdown in the sector.